Setting up to sell to China
Q. I am setting up an online shop to sell products (which are not my own) to China. Customers will purchase online and I will send them small quantities for personal use to their home or office.
I would like to know if this is considered export or not as I am not sending large amounts to be re-sold - a little like us purchasing a book from amazon.com. Is this considered export or not?
I have not been able to get an answer from the government departments I have contacted.
A. You will be sending goods from Australia to China in return for payments which will be remitted to you in Australia. This is clearly an export activity and as such your business will be regarded as an exporter. You are selling single items to individuals so you will be regarded as a retailer.
The Australian government is very keen to stimulate export activity and you may be eligible for assistance in carrying out your activities. I suggest you take some time to study the Austrade website, particularly the sections for exporters.
You might start off by completing their International Readiness Indicator and then reading through the exporting guides. You will need to consider whether the goods you are intending to sell into China are subject to any regulatory restrictions, what competitive goods are already on the market and how acceptable the goods might be in China. You may find that you need to travel to China to carry out some of this research.
The federal government provides Export Market Development Grants to aspiring exporters in order to offset costs incurred in carrying out these activities. Details of these grants can be found on the Austrade website.
If you travel to China you should visit the Austrade offices in the country and seek their assistance. A list of addresses and contact numbers of these offices in China can be found here.
There is a very useful export finance calculator that will advise you on all the government grants and tax concessions available at www.exportfinance.gov.au.
You should also investigate the assistance available through your state government for companies in the state wishing to export. The state governments are keen to expand trade ties with China and they may be able to assist you.
You should visit the Chinese trade commission in Australia. The website contains useful information about doing business with China. You should also talk to the Australia China Business Council and their contact details in your state can be found on their website.
It would be also worthwhile to seek out other Australian businesses that are exporting to China to find out problems and issues that have had to deal with.
You will need to find out how the goods will be treated when they arrive in the country: for example how they will be treated by Chinese customs, whether they will be subject to local taxes, and so on. You will need to consider how you will handle goods being returned.
Good luck with your export business.
Guy Ward, Business Mentor, Small Business Mentoring Service